The global economy is projected to grow at 3.5 percent in 2019 and 3.6 percent in 2020, 0.2 and 0.1 percentage point below last October’s projection as per IMF’s World Economic Outlook’s update.
The update notes that the global growth forecast for 2019 and 2020 had already been revised downward in the last WEO, partly because of the negative effects of tariff increases enacted in the United States and China earlier that year
Overall, the risks to global growth tilt to the downside. This is especially likely to reflect on Afghanistan.
“Growth in the Middle East, North Africa, Afghanistan, and Pakistan region is expected to remain subdued at 2.4 percent in 2019 before recovering to about 3 percent in 2020. Multiple factors weigh on the region’s outlook, including weak oil output growth, which offsets an expected pickup in non-oil activity (Saudi Arabia); tightening financing conditions (Pakistan); US sanctions (Iran); and, across several economies, geopolitical tensions”, the update points out.
It has been conceded in the update that “Key sources of risk to the global outlook are the outcome of trade negotiations and the direction financial conditions will take in months ahead. If countries resolve their differences without raising distorting rade barriers further and market sentiment recovers, then improved confidence and easier financial conditions could reinforce each other to lift growth above the baseline forecast. However, the balance of risks remains skewed to the downside, as in the October WEO”.
Afghanistan’s growth rate thus has been projected to be at 2.4 percent for current year. The silver lining in the economic situation is that Afghanistan was a top reformer in the World Bank’s Doing Business Report, which means it performed well across several indicators for ease of business.
With many projects ranging from air corridors, to industrial investments, agricultural exports and a largely export-friendly policy target, experts believe that Afghanistan can sustain the global slowdown in growth.